On Wednesday morning, a transcript from a recent show cause hearing — in the litigation to determine whether Jackson Walker should be forced to return about $13 million in legal fees earned in bankruptcy cases before former Judge David Jones — was made publicly available.
Southern District of Texas Chief bankruptcy Judge Eduardo Rodriguez had said at the Aug. 7 hearing that he “was pretty confident most of” the transcript of the hearing should be unsealed, but he allowed time for attorneys for Jackson Walker and Jones to object. The docket does not reflect that any objections were filed.
The two-hour show cause hearing was closed to the public, with only former Judge Jones, Jones’ counsel and counsel for Jackson Walker allowed in the courtroom, while Judge Rodriguez questioned the parties as to whether they had gone behind his back and violated a prior order by conducting a private interview with the former judge about his secret romantic relationship with former Jackson Walker partner Elizabeth Freeman.
Members of the media, court observers, counsel for plan administrator for JC Penney and even lawyers for the U.S. trustee’s office were forced to wait in the hallway.
On Aug. 16, Judge Rodriguez found former Judge Jones acted in bad faith by consenting to the interview and ordered him to take 7.5 hours of ethics training. He “narrowly” found that Jackson Walker, Jason L. Boland of Norton Rose Fulbright — who, alongside Rusty Hardin and his law firm Rusty Hardin & Associates, represents Jackson Walker — and Benjamin Finestone of Quinn Emanuel Urquhart & Sullivan, who represents Jones, did not act in bad faith by participating in the interview.
According to the transcript, Finestone, who represents Jones, kicked off the Aug. 7 hearing by explaining that on July 18, he and his client met with lawyers from Rusty Hardin’s firm, Norton Rose Fulbright and Jackson Walker.
Finestone said that neither he, nor any of the roughly seven lawyers who attended the meeting, nor former Judge Jones believed “for one moment” that the meeting ran afoul of the judge’s orders or violated the Judiciary Policy. The judge has previously raised concerns that some lines of questioning of current and past court officials, including former Judge Jones, might violate federal rules of the judiciary that require decision-making be confidential.
The judiciary policy, or judicial policy, is a set of rules governing responses to subpoenas issued to current or former judges or their staff.
“It would not have been something that any of those — any of those lawyers would have, for a moment, wanted to do,” Finestone told the court. “[I]t wasn’t what the meeting was designed for.”
Judge Rodriguez asked how Finestone could “make that argument in good faith” while knowing that former Judge Jones had asked the court for guidance as to the “kinds and types of questions that can be asked” and while knowing the court had not made a determination on that issue.
“And despite that hearing … this entire group here at this hearing went ahead and proceeded with this interview,” Judge Rodriguez said.
Finestone said his intention was to work toward “potentially eliminating any testimony from former Judge Jones in these proceedings.”
“But from the beginning when we proposed to sit down with them for a talk, from our perspective, at least, your honor, it was to — it was to obtain that outcome,” he said. “It was to eliminate the need for testimony and to show them why we were right.”
He also said he imposed a condition on the meeting that whatever was discussed “is not usable in any respect,” including at trial as affirmative testimony, or to impeach.
“But from our perspective, it was a[n] element of the agreement that insured that whatever the definition of testimony may be in the Judiciary Policy, that this was a discussion,” he said. “This was … a discussion for us to show you that we don’t have anything that can help … the matters and that was designed in furtherance of the policies of the Judiciary Policy, complete with potential testimony of a former U.S. Judge.”
Finestone said he viewed his role at the meeting as monitor of the discussion, to make sure that it didn’t veer into the deliberative process or mediation privileges.
“That’s your first mistake,” Judge Rodriguez fired back. “That’s my job, not yours. How is that your job, Mr. Finestone?”
“How do I know you did that? I mean, you’re not wearing the black robe here,” Judge Rodriguez continued. “Nobody in this courtroom [is] wearing the black robe other than me, right?”
Finestone agreed.
“And nobody else in this courtroom is a determining officer but me,” Judge Rodriguez said. “You have no authority, absolutely zero authority to make that call.”
The judge and Finestone then got into a back-and-forth as to whether the meeting with former Judge Jones constituted an “interview” or an informal “discussion.”
“We are in the middle of a legal proceeding here, Mr. Finestone,” Judge Rodriguez said. “This is not a discussion over a cup of coffee, right? These are directly related to what I was going to determine under the guidance.”
The topic of discussion during the interview, Finestone told the court, was mainly former Judge Jones’ relationship with Freeman, and he represented to the court that the parties did not discuss anything that would run afoul of the Judiciary Policy.
“And the important point that I want to convey was that Judge Jones and I, most importantly, never sought to contravene your order of no deposition,” Finestone said. “Everything we did was in an attempt to kill a deposition.”
Judge Rodriguez seemed unconvinced that the agreement not to use what was heard in the interview could hold up.
“How can — how can Jackson walker unlearn what they have learned in this interview?” he asked. “And why was the U.S. Trustee excluded and all the other parties that are entitled to be there if this is going to be an interview?”
Finestone said the judge had raised a “valid concern” about the “fairness of [the] adversarial process.”
“We have no — we have no desire, your honor, to — to tip those scales in any respect,” he said. “We don’t care if Jackson Walker has to disgorge all of these fees. I can represent that to you. We offer to sit down with the United States Trustee. We would love to convince them as well, your honor, that no deposition and no testimony is necessary.”
In light of the issues that arose after the “interview” with Jackson Walker and Hardin’s firm, Finestone said he wouldn’t reach out to the U.S. trustee’s office to conduct the same type of informal discussion with hopes of killing their deposition.
Finestone told the judge that he viewed the court’s order as “sacrosanct.”
Judge Rodriguez was unconvinced.
“Apparently not, Mr. Finestone,” he said.
“But, your honor, it would — ” Finestone began.
“Apparently not,” Judge Rodriguez said.
“Your honor,” Finestone urged again.
“Apparently not from what I’m seeing here today,” the judge replied.
“Well, and I — I’m — I’m disappointed that your honor feels that way,” Finestone said. “Your honor said no deposition. I don’t think that the U.S. Trustee of anybody can argue this was a deposition.”
Judge Rodriguez again accused Finestone of trying to make judicial determinations outside his purview.
“Again — again, you’re putting on a black robe, which you do not have and making that call, Mr. Finestone,” Judge Rodriguez said. “I am so disappointed that I’ve had to hit — set this show cause hearing an bring in a former sitting judge, federal judge into a show cause hearing to deal with this particular issue that could have been avoided had you all waited for my ruling.”
The judge then extinguished Finestone’s hope that the informal interview would result in Jackson Walker withdrawing its deposition request, saying he is “not going to allow them to withdraw it at this point.”
“No. That is not going to happen,” he said. “No sir. Not at all.”
Judge Rodriguez also seemed irked that no one told him during a July 15 hearing regarding what topics could be covered in depositions about the planned July 16 interview with former Judge Jones.
“You were sadly mistaken in proceeding in the way that you did here,” Judge Rodriguez said to Finestone. “Otherwise, I wouldn’t have set this hearing. And as I said before we started this hearing, I’m sadly disappointed that with so much legal talent in this courtroom that this approach was taken. Knowing that it was going to happen during the hearing I was having. And not let me even know about it.”
Judge Rodriguez then focused on Hardin, asking him whether he was the one asking questions during the interview of former Judge Jones. Hardin said he “certainly” “did sometimes ask questions,” but offered that others also asked questions and described the sit-down as “primarily a meeting.”
“How could you say you proceeded in good faith?” Judge Rodriguez asked Hardin. “Didn’t tell me about it during the five hours we spent in this courtroom. Me dealing with all the questions that I was asking, all the objections that were raised. Everything. And nobody’s mentioned a word of it to me while I was sitting here on the bench listening to arguments at Mr. Jones’ request.”
Hardin said he and the other lawyers believed what the judge was taking under advisement at the hearing was what could be discussed during a deposition, not what could be discussed in an informal-style interview.
“Your honor, what — I’m trying to explain what we thought,” Hardin said. “And the fact that you think we were wrong, I deeply regret. We did it in good faith. Mr. Finestone did it in good faith. I think the U.S. Trustees in December did it … in good faith when they had a six-hour interview with a former federal clerk and — and specifically asked questions about deliberative process for six hours.”
Judge Rodriguez said he would address that issue separately later.
“We’re not saying … they did it, too, you know so it’s OK if we do,” Hardin explained. “We are not saying that. What we’re saying is, it’s evidence of the thought processes of all of the lawyers in this case on both sides that what they were doing was perfectly OK because it was not a compelled process interview.”
Judge Rodriguez took a moment to address the attorneys in the room.
“And I want to take a step back and apologize to all the attorneys if my tone seems to be too harsh today,” he said. “I’ve—I’m not usually this reactive to a show cause hearing. I am upset, clearly. But I don’t want that misinterpreted to me that I’m personally attacking anybody appearing before me. That’s not what I’m doing here today. I, as I said at the very beginning, you’re all good lawyers. And I’m severely disappointed to say the least. And that’s what got me worked up about this hearing.”
He lamented that the hearing was being conducted behind closed doors in a sealed courtroom.
“Because this whole hearing is supposed to be open and transparent,” he said. “And it’s been lacking because of things like this. And that — that’s what really concerns me. And the implication that a former federal employee can sit for an interview and parties can gain knowledge about the internal workings of a court and publicize that to anybody who wants it is wholly improper, Mr. Hardin. And that’s what’s got me worked up about this.”
Then, it was Boland’s turn to face questioning from Judge Rodriguez. He said he felt the informal interview Jones offered to give was tantamount to former Judge Jones’ decision to answer questions from The Wall Street Journal after news of the secret relationship was publicly reported.
“We viewed it as his right to talk,” Boland said.
Judge Rodriguez interjected.
“That wasn’t a legal proceeding,” he said. ‘He has a — everybody has a First Amendment right to talk to whoever they want to, you know? But when it’s involved in a proceeding that’s before this court, it’s different. Things change. Rules apply. Guidance applies. My orders apply.”
Toward the end of the hearing, former Judge Jones asked Judge Rodriguez if he could say a few words. After Finestone said he had no objections to his client speaking, Jones began.
He touched on concerns Judge Rodriguez had previously raised about there being no case law in the country interpreting the application of the Judiciary Policy and said “there’s not a lot of guidance” on the issue as a result.
Former Judge Jones then praised Judge Rodriguez for being a diligent jurist who does “the absolute best every day that you sit in that chair” before pivoting to gently criticize the order barring depositions in the case until Judge Rodriguez issued a ruling on what could be covered in a deposition.
“Having a more instructive order would be helpful to all the parties,” Jones said. “I would love an order that says no one can talk to Jones about anything until I say so. That would be terrific. I encourage that.”
But in former Judge Jones’ reading of the order, it did not disallow the kind of informal interview that took place and prompted the show cause hearing, he said.
“Usually when lawyers have a question about an order, they ask for a hearing,” Judge Rodriguez said. “They need clarification. And that — and my order directly cites the [judicial] guidance. And not to read the guidance — to misinterpret the guidance as — as an interview, not being part of this process, is just very misguided.”
Jones then offered to give the court his definition of the word “interview.”
Judge Rodriguez declined. Jones said he felt that hearing the “views of the parties” who participated in the interview “might help explain why they did what they did.”
“Go right ahead if you insist,” Judge Rodriguez said.
Jones explained that because of the terms placed on the interview, namely that what was said could not be used anywhere for any purpose, distinguished it from the types of communications that were deemed at least temporarily off limits in Judge Rodriguez’ order.
“The object of this was, Judge, is my relationship has been the subject of misinformation everywhere,” Jones said. “It has caused, and I’m not asking for sympathy, it has caused an immense amount of embarrassment. It’s affected my relationship. It’s done a lot of very negative things. And most of it’s simply wrong.”
“So the purpose in doing this was really to give an opportunity to say hey, let me tell you what the relationship really was and really wasn’t,” Jones said.
Jones reiterated that he didn’t discuss the deliberative process or the way the court functioned.
Judge Rodriguez asked Jones why he would have requested the hearing that took place, seeking the court’s guidance on the Judicial Policy, and then the next day sit for the interview while he had the issue under advisement.
“Whatever it is that you say I have to answer becomes the official statement of the United States Judge, retired, resign, whatever — whatever it is you want to put on the end of it,” Jones said. “It’s still the statement of a United States Judge. That’s the purpose of going through that process. When I tell Mr. Hardin that I had an affair when I was married, but that conversation doesn’t exist, that’s not the statement of anybody. He knows it, but he already knew that. Or he believed he knew it, ‘cause they took my ex-wife’s depo. That’s how far this is going.”
“But as I told him, I’m going to answer honestly about my relationship,” Jones said. “Am I perfect? I am not. But I’ve never lied about it. That’s the different. The statements don’t exist.”
Jones said in offering the informal interview, he hoped to “convince this group of lawyers that I was simply irrelevant.”
“And I think I did,” he said.
Had Judge Rodriguez’ order said “there will be no communication with Jones until I rule,” Jones said he never would have sat down with the attorneys to discuss his relationship.
“Now I get that you think, as we marched backward with the implications, that what I did with Jackson Walker violation that statement of no depo,” Jones said. “Again, I’m just going to respectfully disagree. I took no oath. I wasn’t under any compulsion. I didn’t have to answer anything I didn’t want. And I got to ask questions.”
As an example of the clarification about his relationship with Freeman that he was trying to offer the attorneys, Jones brought up a photograph of Freeman water skiing with another person that Jackson Walker had gotten in discovery from the U.S. Trustee.
The U.S. Trustee believed Jones was in the photograph. Jones told the court he doesn’t know how to water ski and that he also represented that to the Jackson Walker attorneys in his interview.
“But it would not surprise me to hear Mr. Hardin stand up here and say that, you know, we’ve spent $75,000 trying to figure out who this guy was on water skis when I could simply say it isn’t me,” Jones said.
Freeman later clarified to attorneys who reached out to her that the photograph was of her and her brother, according to the transcript.
“I was trying to be helpful,” Jones said. “I was actually [trying to] help a process that, quite frankly, I can’t imagine what you’re sitting through and having to deal with. But the goal was to try and help.”
“I was trying to get rid of some of the noise, cause that’s what a lot of it is, is just noise,” he said. “And if that was wrong, then that was wrong.”
The case number is 23-00645.